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ARRS could be defunded in two years due to inflation

by Caitlin Tilley
1 August 2022

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The Additional Roles Reimbursement Scheme (ARRS) could be defunded in two years, due to rising inflation, if an agreement on the ‘balancing mechanism’ can be reached.

If the BMA GPC England and NHS England can agree on a process for the mechanism, funding set aside for new primary care network staff could be used to ‘offset’ the rising costs incurred as a result of the inflation.

This week, the Government also announced its recommendation for salaried GPs and staff to receive a 4.5% pay rise, to come out of existing GP funding.

The purpose of the GP contractual ‘balancing mechanism’ was to – if required – ‘adjust between the practice level global sum and the network level Additional Roles Reimbursement Sum depending on levels of real terms partner NHS earnings’ in the case of high inflation or deflation. 

This would ‘enable global sum adjustment equally in either direction’ and should ‘provide confidence to the profession and taxpayers alike’, according to the contract.

Former GPC chair Dr Richard Vautrey said the ‘actual process’ for the pay balancing mechanism was ‘always up for negotiation’ but never finalised.

It was part of negotiations between BMA GPC England and NHS England when they broke down last year, so ‘the details haven’t gone beyond what’s in the written paragraph within the original contract document from 2019’, he explained.

However, it would not be an immediate remedy to global sum shortfalls.

Dr Vautrey said that because the agreement was ‘based on using published earnings figures’, it would ‘always be retrospective’. 

He said: ‘Because of the way that GP pay calculations are done, we only find out exactly what the average earnings are almost two years after that particular year.

‘If there was a significant change from what was expected, as part of the agreement, that would then trigger a negotiation about whether or not to invoke the balancing mechanism. But it would be retrospective. 

He explained: ‘For instance, for this financial year that we’re in at the moment, 2022/23, we won’t get the figures for average GP pay for another two years. So we won’t know exactly how not only inflation or the changes in expenses, and other factors related to GP practice income will play out and what the actual final outcome is.

‘But then, in two years’ time, if there had been a change, then that could then trigger a negotiation around that. But that would be two years away.’

As of yet, the balancing mechanism has never been used.

Dr John Hughes, chair of grassroots group GP survival, said: ‘Unfortunately, the pay balancing mechanism hasn’t really been working for the last number of years. The expenses component certainly hasn’t kept up with the pay awards that people have been having to make to staff. 

He said: ‘Part of the problem is that the GMS pot is finite, it’s not properly increased. Probably a lot of the money that should have gone to things like that was instead bumped into the PCN DES and came with strings attached rather than actually going to the genuine expenses the practices and partners were already having.’

Asked whether the balancing mechanism could come into play, a BMA spokesperson said that the GP Committee was considering what action to take.

On Friday, it emerged that the GP Committee voted to explore GP industrial or collective action in response to the ‘derisory’ pay award.

This story was initially published on our sister title Pulse.